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DIGITAL & INCLUSIVE GROWTH: OUR MANTRAIn almost every sphere of business today, we can find the imprints of digital tech-nology. Banking is also no exception. Digitally transforming the world of banking for the better in more ways imaginable, making customers happier in the process.

A forerunner in digital banking, Federal Bank has always believed in fostering customer relationships by providing them cutting-edge banking solutions digitally. By digitalizing the various operations of banking, we ensure the growth of both our customers and our organization at the same time.

In addition to going digital, Federal Bank continues to give priority to inclusive growth covering all sections of society. Extending banking services to customers irrespective of reach and class, we strive for the all-inclusive development of our customer base.

Our commitment to wholeheartedly embrace the digital technology continued throughout the past year to reach new heights. This years annual report cover is a reflection of the changing times and the ways in which our digital revolution is transforming the whole process of banking. In the following pages, we give you a peep into how digital became our mantra for all-encompassing growth. Setting us ready for new challenges in the future

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Who we are:The Bank was incorporated on April 23, 1931 as the Travancore Federal Bank Limited Nedumpram under the Travancore Companies Regulation, 1916. Late K. P. Hormis, the visionary banker and founder took up the reigns in 1945 and built the bank a nationwide institution. The Banks name was changed to The Federal Bank Limited on December 2, 1949. The Bank was licensed under the Banking Regula-tion Act, 1949, on July 11, 1959 and became a scheduled commercial bank under the Second Schedule of Reserve Bank of India Act, 1934 in July 20, 1970. Today we are present in 25 States and 5 Union Territories and the bank is listed in Bombay, Cochin, National and London Stock Exchanges.

ABOUT THE

BANK

To be the Most Admired Bank by all stakeholders

OUR VISION

OUR MISSIONDevote balanced attention to the interests and expectations of stakeholders, and in particular:

Shareholders: Achieve a consistent annual post-tax return of 18% on net worth.

Employees: Develop in every employee a high degree of pride and loyalty in serving the Bank.

Customers: Meet and even exceed expectations of target customers by delivering appropriate products and services, employing as far as feasible, single window and 24-hour-seven-day-week concepts, leveraging a strengthened branch infrastructure, ATMs, other alternative distribution channels, cross-selling a range of products and services to meet customer needs varying over time, and ensuring the highest standards of service at all time.

1,247 Branches (March, 31, 2015)

1,485 ATMs (March 31, 2015)

10,981 Team (March 31, 2015)

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PEFORMANCE DASHBOARD

Volume growth

Income growth

Total Income grew from

` 7639.92 Cr to ` 8297.77 Cr(Up by 8.61%)

Net InterestIncome grew from` 2228.61 Cr to` 2380.41 Cr(Up by 6.81%)

Other Income grew from

` 693.85 Cr to` 878.31 Cr

(Up by 26.58%)

Key Ratios

Provision Coverage Ratio

83.94%

Earnings Per Share

` 11.75

CRAR Under BASEL-III

15.46%

Return onEquity

13.77 %

Return onAssets

1.32%

Net NPA

0.73%

Home Loans grew from

` 5929 Cr to` 6852 Cr

(Up by 15.57%)

Retail Advances grew from

` 14,124 Cr to` 16,135 Cr

(Up by 14.24%)

CASA Deposits grew from

` 18401 Cr to` 21550 Cr

(Up by 17.11%)

AGRI Advances grew from

` 5139 Cr to` 6312 Cr

(Up by 22.83%)

NRI Deposits grew from ` 20663 Cr

to ` 25936 Cr(Up by 25.52%)

SME Advances grew from

` 11,021 Cr to` 12,918 Cr

(Up by 17.21%)

Priority SectorAdvances grew

from ` 16,141 Cr to` 20,870 Cr

(Up by 29.30%)

5

6

Performance Dashboard

70,8

25

45,7

16

4,05

7

17,7

27

NR Deposits Deposit Mix

1247

7

Asset Quality

Gross NPA % Net NPA %

44,096

3.44%

0.74%

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Dear Shareholders,

Every year brings with it a mixed bag of opportunities and chal-lenges. 2014-15 was no different in that regard. But, what made the last financial year truly special for us at Federal Bank was the way in which we resolutely harnessed our energies and resources to script a resounding success story. It was not a leap year accord-ing to calendar, but it was most certainly a leap year for us in terms of profit and growth. So, I have the utmost pride and joy to present before you the annual report of Federal Bank for the year ended March 31, 2015.

The Indian economy in 2014-15 has shown a beginning towards improved economic outlook on the back of controlled inflation, decline in oil prices and initiation of long pending reforms among others. The macro economic situation in India has shown signs of improvement during the year.

When you look at the banking sector specifically, it presents a picture of contrasts. The Yin and Yang of challenges and oppor-tunities stare at us at every twist and turn of our journey. Either you can get submerged by the waves of change or you can ride the crest of change and go places. At Federal Bank, weve opted for the latter. Our determination to trim our sails according to the wind is showing encouraging results at all levels. It is immensely gratifying to note that on many key performance parameters such as profitability, EPS, dividend and the number of branches, your bank could post impressive results.

MESSAGEFROM THECHAIRMAN

CA Nilesh Shivji Vikamsey

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The Bank posted its highest ever Operating Profit and Net Profit, the latter breaching the ` 1000 Cr landmark for the first time in history. The bank continued to improve its Asset Quality in FY15.

The Net Worth of the Bank increased to ` 7738.13 Cr as on 31.3.2015. The Capital Adequacy Ratio (CRAR) of the Bank, computed as per Basel III guidelines, stands at a comfortable level of 15.46 % as on 31st March 2015. The Bank continued to expand its footprint and added 73 branches and 126 ATMs during the year to take the tally to 1247 branches and 1485 ATMs as on 31st March 2015.

When we look out ahead in the banking industry in India, a dif-ferent and exciting picture emerges. Indians are embracing mobile banking, internet banking and a range of consumer-friendly technology in a big way. Many people will want to do those day-to-day transactions from the palm of their hands because its far faster than taking time out of their busy lives to visit a branch.

iour are constantly changing and as an organisation which prides itself on digital innovation, we feel very strongly about opening up our channels to suit all lifestyles. The age of the pen and letter is still very much alive, but we need to understand that society is diverse, not least technologically. Millions of people who have become sophisticated digital users now expect the same conven-ience, speed and functionality from their bank with the same level of security they would get from a brick and mortar branch. Your bank is continuously scanning the ever widening universe of digital technology to come up with products and services thatll keep us relevant.

On the subject of Inclusive Banking, enough talk has already happened. Now the time has come to walk the talk. A revolution is sweeping the country in the way millions choose to manage their finances. Your bank doesnt want to look at the challenge of inclusive banking a regulatory issue. Rather, well want to convert it as a strategic business opportunity. We firmly believe that with the right mix of customization and localization, our mission to reach out to the hinterland of India will yield us rich dividends. Last year alone, your bank opened 46 new branches in rural India. We have prepared an ambitious blueprint to make our presence felt in rural India in a substantial manner, offering our rich bouquet of products and services to the unbanked millions living in there.

On behalf of the board of directors, I wish to express my sincere gratitude to all the shareholders of the bank. Your support, pa-tronage and encouragement instilled in us the drive and energy to keep the flag of excellence flying high. I assure you that your bank will continue to reset the benchmark for growth and performance year after year. I also wish to place on record my gratitude to all the regulators and authorities, as well as our valuable custom-ers. Last, but not the least, I wish to thank our committed team of Federals who are leaving no stone unturned to implement the vision and roadmap that were chalking out for our bank.

On a personal note, I am starting an exciting new voyage as the Chairman of Federal Bank. I know that my responsibilities are immense and at this juncture I wish to seek the support and patronage of each one of you. Together, well chart this fine or-ganization to vast new horizons of growth and consolidation.

The Yin and Yang of challengesand opportunities stare at us at every twist and turn of our journey. Either you can get submerged by the waves of change or you can ride the crest of change and go places. At Federal Bank, weve opted for the latter.

Along with this digital leap, the other equally revolutionary de-velopment that is fast transforming the banking landscape is the unprecedented emphasis on Inclusive Banking. At Federal Bank, we view both these developments as hugely positive and have started devising our strategies accordingly.

To believe we can continue as an industry on the basis of a 10 am to 5pm working day is archaic. Technology and consumer behav-

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Dear Shareholders,

I am happy to present to you our results for the financial year 2014 15. It is a matter of pride for all of us that 2014-15 was a landmark year with your bank posting its highest ever operating profit and net profit, delivering excellent performance in all the key parameters, despite a very challenging environment.

In the year 2014-15, the Indian economy continued to show signs of turning the corner. Growth picked up in 2014, infla-tion declined, and the external position was better compared to the previous financial year. The government underscored its inten-tion to move steadily to tackle politically difficult structural issues that have stalled investment and limited economic performance in recent years. Despite the sprouting of green shoots, a robust recovery is beginning to take hold and also private investment is showing signs of picking up.

Banking, today, is about connecting people to their money more quickly, accurately and efficiently than ever before. As banks begin to place their focus more firmly on what customers want from the online and mobile platform, banking will evolve a very dif-ferent business model from what exists today. The banks that become the early adopters of this new technology will undoubt-edly be best positioned to lead the industry forward. At Federal Bank, we are exploring the digital frontier in full vigour and have already developed an impressive portfolio of online/digital products. We have made our presence felt in Internet Banking and Mobile Banking. Our rich bouquet of online services includes

MESSAGEFROM THEMANAGINGDIRECTOR& CEO

Shri. Shyam Srinivasan

11

Online Healthcare Portal, Online Religious Offering, Scan n Pay, Easy Utility Bill Payments and Tax payment through FedNet. What we strive to do at Federal Bank, is to provide a seamless customer experience- be it in the traditional branch banking model or the new digital mode.

Your bank is constantly pushing the envelope on the digital front and recently joined hands with M/s MobME wireless, and Startup Village to launch Indias first focused FinTech Accelerator Programme, a unique programme that aims at speeding up technological innovations in the financial sector space.

In the world of banking, tectonic shifts are taking place. Powerful forces are reshaping the banking industry, creating an impera-tive for change. Banks need to choose what posture they want to adopt - to lead the change, to follow fast, or to manage for the present. At Federal Bank, we always believed in leading the change. Our continuous efforts to decode the profound societal

Operating profit grew 9.96% 1480.39 Cr in FY 14 to 1627.79 Cr in FY 15. Other income grew 26.58% from 693.85 Cr as on 31.03.2014 to ` 878.31 Cr as on 31.03.2015.

The Earning per Share (annualized) and Book Value per share for the year ended FY15 increased to ` 11.75 and ` 90.33 as against ` 9.81 and ` 80.36 in FY14.

The Bank continued to expand its footprint and added 73 branches and 126 ATMs during the year to take the tally to 1247 branches and 1485 ATMs as on 31st March 2015. The Bank also has its Representative Office at Abudhabhi, UAE.

We know that the government of India is firmly pursuing the agenda of inclusive growth with a slew of new decisive initiatives. Your bank is also determined to play its rightful role in this exciting new narrative of growth. Towards this, Federal Bank recently tied up with New India Assurance Co. Ltd for the implementation of Pradhan Mantri Suraksha Bima Yojana. On its own, the Bank is breaking new ground in inclusive banking by providing finan-cial literacy to the under privileged and through innovations like Branchless banking through Business Correspondents (BCs), FED-JYOTHI - ICT based FI solution and Financial Inclusion Branches Grama Jeevan branch

Last year also saw us bagging a few prestigious awards and rec-ognitions. The most significant among them was the best small sized bank award that we received from Businessworld - Price Waterhouse Coopers combine. They chose Federal Bank as the Best Bank among Small Banks in India in its Best Bank Survey, 2014. Over the years, your bank has expanded its book, beefed up assets, cut non-performing assets (NPA), tapped new revenue streams, widened its geographical reach and augmented its tech-nology to stay ahead of the competition. These traits helped it to bag the Best Small-sized Bank' distinction in the BW - PwC Best Banks Survey, 2014.

Apart from this, the Bank has also bagged a few other important accolades last year. Your bank won the Banking Frontiers Finnoviti Award 2015 for its innovative product Scan n Pay. As a result of your banks commitment to inclusive growth, the Bank bagged the CNBC Award for financial inclusion last year. The Bank also won GreenTech HR Award 2014, Finacle Client Innovation Award and MasterCard Innovation Award.

I take this opportunity to thank our Board and in particular the outgoing Chairman Prof. Abraham Koshy for their valuable insights and continued support. As we forge ahead, with the buz-zwords digital and inclusion resonating deep within and taking confident strides into the future, let me thank you for your un-stinting support. Your patronage keeps us motivated and focused. I remain Proud to be a Federal.

changes happening around us and to provide a bevy of products and services to meet the changing needs of a changing India have yielded impressive results. Let me share with you an overview of last years financials.

The banks net profit breached ` 1000 Cr landmark for the first time in history. Net profit grew from 20% yoy from ` 838. 89 Cr in FY14 to ` 1005.75 Cr in FY 15

In the world of banking, tectonic shifts are taking place. Powerful forces are reshapingthe banking industry, creating an imperativefor change. Banks need to choose whatposture they want to adopt - to lead thechange, to follow fast, or to manage for the present. At Federal Bank, we alwaysbelieved in leading the change.

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BOARD OF DIRECTORS

Standing from left to right:Shri. Dilip Gena Sadarangani, Shri. Harish H Engineer, CA Nilesh Shivji Vikamsey, Shri. Sudhir Moreshwar Joshi

Sitting from Left to right:Smt. Grace Elizabeth Koshie, Shri. Shyam Srinivasan,

Prof. Abraham Koshy, Shri. K. M. Chandrasekhar, Smt. Shubhalakshmi Panse

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MANAGEMENT TEAM

SAMPATH DVARGHESE K IASHUTOSH KHAJURIA

MADHAVAKUMAR V R

JOSE K MATHEW

MOHANACHANDRAN K R

JOSE V JOSEPH PRADOSH KUMARMOHAPATRA

THAMPY KURIAN

ANTU JOSEPH

Digitalization, as a whole, has changed the world for

the better. With its faster means of operation, the digital

technology drives organizations to reach their optimal

efficiency in terms of performance. In banking, digitaliza-

tion has enabled faster services that in turn have ensured

enhanced customer delight at all levels. Exactly why, we

at Federal Bank have embraced the digitalization enthu-

siastically in our diverse fields of processes. We believe

that fast growth is dependent on faster services. And

going fast means only one thing to us. Digitalization.

REACHDIGITAL

IS ALL ABOUT

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Your Board of Directors has immense pleasure in presenting this 84th Annual Report of The Federal Bank Limited, along with the audited financial statements for the year ended March 31, 2015.

Financial Results

DIRECTORS REPORT

Financial Parameters for the year ended 31 March 2015 31 March 2014

Net Interest Income 2,380.41 2,228.61

Fee and Other Income 878.31 693.85

Net Revenue 3,258.72 2,922.46

Operating Expense 1,630.93 1,442.07

Operating Profit 1,627.79 1,480.39

Net Profit 1,005.75 838.89

Profit brought forward 787.36 516.38

Total Profit Available for appropriation 1,793.11 1,355.27

Appropriations:

Transfer to Statutory Reserves 251.66 209.73

Transfer to Revenue Reserves 109.87 103.07

Transfer to Capital Reserves 28.76 17.95

Transfer to Investment Reserve 46.28 -

Transfer to Special Reserves 35.00 38.23

Proposed Dividend 188.49 171.06

Provision for Dividend Tax 38.37 27.87

Depreciation on Expired assets 2.31 -

Balance Carried over to Balance Sheet 1,092.37 787.36

Financial Position (as on)

Deposits 70,824.99 59,731.28

Advances 51,284.99 43,436.10

Total Business (Deposits + Advances) 1,22,109.98 1,03,167.38

Other Borrowings 2,308.24 5,687.96

Investments 24,409.19 24,117.85

Total Assets ( Balance Sheet Size) 82,850.48 74,594.15

Equity Capital 171.33 171.06

Ratios

Return on Total Assets (%) 1.32 1.20

Return on Equity (%) 13.77 12.80

Earnings Per Share (Rs) 11.75 9.81

Book value per share (Rs) 90.33 80.36

Operating cost to Income (%) 50.05 49.34

Capital Adequacy Ratio (%) Basel (III) 15.46 15.14

Amount (` in Crore)

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Highlights of Performance Growth in Business

Total business of your Bank reached ` 122109.98 Cr as on 31 Mar 2015. Total deposits increased by 18.57% from ` 59731.28 Cr in FY14 to ` 70824.99 Cr in FY15. The total advances of your Bank stood at ` 51284.99 Cr at the end of the year.

Average deposit portfolio of the bank had grown by 11.43% to reach ` 63342.04 Cr and average advance portfolio had grown by 11.42% to reach ` 46689.24 Cr.

NRE deposits led the path showing a growth rate of 27.71%, an increase from ` 18973.56 Cr to ` 24230.90 Cr and Retail deposits followed the suit by growing @ 17.86 % from ` 57269.57 Cr to ` 67499.05 Cr. CASA deposits also displayed a growth of 17.11% to reach, ` 21549.57 Cr from ` 18400.79 Cr.

The Savings deposits of the Bank has touched to 17726.91 Cr by growing 15.98% over that of the previous fiscal of `15284.26 Cr.

The investment portfolio of the Bank registered a growth of 1.21% to reach ` 24409.19 Cr from ` 24117.85Cr in the previous fiscal. The average investments on Y-o-Y registered a growth of 4.23% basis as compared to the previous fiscal year.

Net Profit

During the year ended March 31, 2015, your Bank clocked a net profit of ` 1005.75 Cr.

As a result of refinement in asset quality, the Bank could rein in the total provisioning to ` 622.04 Cr. This was mainly aided by a reduced loan loss provisioning of ` 204.35 Cr (even at a provi-sion coverage ratio of 83.94%). An amount of ` 515.29 Cr was earmarked for taxes.

Return on Average Equity and Return on Average Total Assets stood at 13.77 % and 1.32 % respectively. Earnings per Share ( face value of Rs 2 each) of the Bank, as on 31st Mar 2015 was ` 11.75 comparable to ` 9. 81 in the previous year. Book value per share has increased from Rs 80.36 in FY 14 to ` 90.33 during FY 15.

Operating Profit

The Operating Profit of your Bank had grown as compared to previous year to reach ` 1627.79 Cr

The Net Interest Margin of the Bank for the year stood at 3.27 %, despite the interest rate volatility. Net Interest Income of the Bank for the period increased to ` 2380.41 Cr from ` 2228.61 Cr. During the financial year ended 31st March 2015, the total non-interest income of the Bank grew to ` 878.31 Cr.

Expenditure

The fiscal year ended 2015 witnessed an increase in the total expenses of the Bank which reached Rs 6669.98 Cr from 6159.53 Cr, an increase of 8.29%. Interest expenses increased to 5039.05 Cr in FY 15 from ` 4717.46 Cr in FY 14. Operating Expenses of the Bank during the fiscal year grew from Rs1442.07 Cr to `1630.93 Cr. This is mainly due to increase in salary & allowances, expenses related to branches expansion etc.

The cost of deposits of the bank has come down during the year. The cost of deposits is 7.31% as compared to 7.40% in the previous year. Average Cost of all funds (Deposits + Borrowings + Bonds) recorded a marginal decrease and reached 7.44 % from 7.56 %. The Interest expenses as percentage to total income stood at 60.73 %. The Cost to Income ratio of the Bank stands at 50.05 % (49.34 % in FY 2014)

In the current fiscal, the CASA to Total deposits of the Bank de-creased marginally from 30.81% in FY14 to 30.43% in FY15. However, the deposit mix resulted in higher interest expense of ` 5039.05 Cr, an increase of 6.82% over previous year.

Income

Total income of the Bank during the fiscal year 2015 recorded 8.61 % growth to reach ` 8297.77 Cr from the previous fiscal year figure of ` 7639.92 Cr. The interest income component grew by 6.82 % Y-o-Y while other income increased to ` 878.31 from ` 693.85 Cr.

Income from advances increased by 8.70 % to reach ` 5446.83 Cr from ` 5011.08 Cr. At the same time, income from investments registered a steep rise to reach ` 1835.92 Cr from ` 1776.83 Cr clocking a 3.33 % annual growth.

The yield on advances stood at 11.67% and the yield on Invest-ments at 7.12 %. The Net Interest Margin for the fiscal year is at 3.27% as against 3.32 %, in the previous year. Focused attention on streams of fee based income and other income resulted in an increase of 26.58%. The total other income grew to 878.31 Cr in the current fiscal from ` 693.85 Cr in the previous fiscal.

Spread

During the fiscal year the Banks spread on advances (gross) de-creased to 4.36% from 4.55 % and spread on investments (gross) stood at 0.80% from 0.44 %. The Spread (net of provisions) on advance decreased to 3.92% from 4.01 % of last year.

Loan Asset Quality

In the fiscal 2014-15, your Bank consolidated its credit underwrit-ing processes through Hub System which was implemented a few

18

years back. The coordinated efforts of National Credit Hub, Credit Monitoring Cells and the Stressed Assets Management Cell ensure that fresh slippages were reduced to a large extent.

The Banks Gross NPA and Net NPA stood at 2.04 % and 0.73% respectively as at the end of 31st March 2015 as against 2.46% and 0.74%, respectively during 2013-14.

The total provisions held against non-performing advances, ex-pressed as a percentage of gross NPAs amounted to 83.94 % (including technically written off accounts) at the end of FY 2014-15.

The Bank managed its NPA portfolio prudently, by considering and executing all options viz. SARFAESI, Compromise, Lok Adalat and DRT that offered the best return to the Bank.

Provision Coverage

As on 31st March 2015, the Bank held a total provision of ` 666.38 Cr. Provision coverage for NPAs as at 31st March 2015 stood at 63 %. As on 31st March 2015, the provision coverage ratio of the Bank, including written off accounts is 83.94 %. As per the RBI directive, Banks should hold minimum provision coverage of 70 % including technically written off accounts.

Capital Adequacy

Historically, your Bank has been strong on capital adequacy. CRAR of the Bank calculated in line with Basel III norms stood at 15.46% which is considerably higher than the 9 % stipu-lated by RBI. Of this, Tier 1 CRAR is at 14.81 %.

Share Value

Earnings Per Share (face value ` 2 /- each) of your Bank has in-creased from ` 9.81 to ` 11.75 during the year under review. Return on Equity during the year reached 13.77 % in the fiscal year ended 31st March 2015.

State of the Affairs of the Bank

Your Bank continued on its consistent performance during FY 2014-15 with PAT crossing the land mark figure of ` 1000 Crore. The total Business of the Bank increased by 18.36% to `122109.98 Cr for the year ended 31st March 2015.

There is no change in the nature of business of the Bank for the year under review. Further information on the Business overview and outlook and State of the affairs of the Bank is discussed in detail in the Management Discussion & Analysis.

Dividend

Continuing the Banks policy of striking a fine balance between retained earnings and dividend distribution, the Board of Direc-

The amounts, the Bank proposes to carry to any reserves

Reserve Amount (` in Crore)

Transfer to Revenue Reserve 109.87

Transfer to Statutory Reserve 251.66

Transfer to Capital Reserve 28.76

Transfer to Investment Reserve Account 46.28

Transfer to Special Reserve 35.00

There are no material changes affecting the financial position of the company which have occurred between the end of the finan-cial year of the company to which the financial statements relate and the date of the report.

There are no material orders passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future;

Deposits

Being a banking company, the disclosures required as per Rule 8(5)(v)&(vi) of the Companies (Accounts) Rules,2014, read with Section 73 and 74 of the Companies Act, 2013 are not applicable to your Bank.

Increase of Capital

The Paid Up Capital of the Bank was increased by an amount ` 26,86,824/- by subscription of 13,40,412 ESOS shares of ` 2/- each and subscription of 3000 Rights-2007 released from abeyance. The Paid up Capital of the Bank as on 31.03.2015 is `171,33,10,394/- consisting of 856655197 shares of ` 2/- each.

Employee Productivity

Business per employee of the bank during the period stood at ` 11.15 Crore and the profit per employee of the Bank stood at ` 9.38 Lakh during the fiscal.

tors have recommended a dividend of 110% i.e. `2.20 per Equity Share on face value of ` 2/- each for the year 2014-15 (previous year 100% i.e ` 2 per Equity Share) subject to the approval of the members in the ensuing Annual General Meeting. Enhancing shareholders value has always been a guiding philosophy of the Bank.

19

Employee Stock Option Scheme (ESOS)

The Bank has instituted an Employee Stock Option Scheme to enable its employees including whole time Directors to participate in the future growth and financial success of the Bank. Under the Scheme 4,27,58,250 options can be granted to the employees. The Employee Stock Option Scheme is in accordance with the Securities and Exchange Board of India (Employee Stock Option and Employee Stock Purchase Scheme) Guidelines, 1999. The eligibility and number of options to be granted to an employee is determined on the basis of various parameters such as scale, designation, work performance, grades, period of service, annual fixed pay, Banks performance and such other parameters as decided by the Compensation Committee from time to time in its sole discretion and is approved by the Board of Directors

The Banks shareholders had approved the scheme for issuance of stock options to employees including whole time Directors on December 24, 2010.

The option conversion price set has to be the closing price on the day previous to the grant date. The Compensation Com-mittee granted 1,73,60,100 options during the year 2011-12, 1,22,42,375 options during the year 2012-13, 130,47,125 options during 2013-14 and 55,78,225 options during 2014-15. The options granted which are non transferable, with vesting period of 1,2,3 & 4 years subject to standard vesting conditions, and must be exercised within five years from the date of vesting. As on 31 March 2015, 14,14,692 options had been exercised and 4,05,62,093 options were in force.Other statutory disclosures as required by the SEBI guidelines on ESOP are given in Annexure II to this report.

Investor Education and Protection Fund

As per the Companies Act 2013, dividend unclaimed for more than seven years from the date of declaration is to be transferred to Investor Education and Protection Fund. On 15.10.2014 the Bank had transferred ` 41,80,576/- to the above Fund, being the unclaimed dividend for the year 2007.

Expansion of Network

Your Bank has 1247 branches and 1485 ATMs as on 31st March 2015. The Bank had opened additional 73 branches and 126 ATMs during the year to improve its footprint throughout the country including un-banked centers as per RBIs guidelines. The Bank had opened maximum number of branches in the states of Tamilnadu, Punjab, Gujarat, Karnataka and Maharashtra and also Kerala.

Corporate Social ResponsibilityCSR Policy

For us in Federal Bank reaching out to people who needs assistance is part of the values passed down by our Founder Shri K P Hormis. The objectives we intend to achieve through our CSR programs aim at developing communities and create a sustainable future for the generations to come. Our activities touch a wider footprint through areas like Health, Education, Woman empowerment, En-vironment sustainability, and other activities as permitted under Companies Act, 2013, all aimed at creating a meaningful differ-ence in the society where we live and operate in.

Objectives

i. To identify and implement CSR projects aimed at uplifting the weaker sections of the social strata and to support the needy, disabled and elderly people.

ii. To empower youth, children and woman through Skill building programs

iii. To get involved in activities that can build a sustainable environ-ment for future generations

Geographical Coverage

Bank with its presence pan India, will be extending its CSR activi-ties across all geographies.

CSR Expenditure

The amount to be spent by the Bank towards CSR for FY 2015 as per Section 135 of the Companies Act 2013 comes to ` 23.83 Crores. Amount spent by the Bank this year towards CSR was ` 7.27 Crore. Your bank is committed to increase its CSR impact including the balance amount of ` 16.56 Crore for FY 2015. Since long term sustainability is a key factor that will decide success of CSR programs, a steady and cautionary approach was adopted in the first year so that sufficient platform/expertise is build to take forward Banks CSR activities in the future.

Risk Management

The Board of Directors oversees the enterprise wide risk man-agement functions of the Bank. A separate Risk Management Committee of the Board is in place for bringing in a top to down focus on risk management. Risk management is coordinated and administered by the Integrated Risk Management Department. The Department has three dedicated divisions for credit risk, market risk and operational risk management. Treasury activi-ties are separately monitored by the Mid Office, which is a part

20

of Integrated Risk Management Department. Business Continu-ity plans and Information Security plans also form part of risk management functions in the Bank. Bank has also established a Transaction Monitoring Cell to provide a 360 degree surveil-lance coverage of the operations of the Bank. Risk Management policies are approved by the Board of Directors, and reviewed from time to time. Executive level risk management committees, such as Credit Risk Management Committee, Asset Liability Man-agement Committee, Operational Risk Management Committee, Business Continuity Plan Committee, Information Security Com-mittee, regularly assess the functional efficiency of the Bank in risk management and refine the policies and processes. Responsibility for identification, measurement and controlling of risk in various spheres of activities of the Bank is vested with a senior executive at the level of General Manager, who functions as the Chief Risk Officer of the Bank, reporting to the Managing Director & CEO. All material risks of the Bank, emerging in the course of its business are identified, assessed and monitored and in our opinion present-ly there is no material risk which threatens the current functioning of the Bank.

Internal Control Systems and their adequacy

The Bank has an Internal Control System, commensurate with the size, scale and complexity of its operations. The Inspection and Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Bank, its compliance with operating systems, accounting procedures and policies based on the internal audit reports. The scope and authority of the Internal Audit function is defined in the Audit Policy of the Bank.

The audit findings are discussed in the internal committees of the Bank and corrective action in their respective areas are undertaken to strengthen the controls. Significant audit observations and cor-rective actions thereon are presented to and reviewed by the Audit Committee of the Board.

Vigil Mechanism/Whistle Blower Policy

Bank has comprehensive Fraud Risk Management Policy and Whistle Blower Policy which are reviewed and updated from time to time. The Whistle Blower Policy is available in Banks website and Banks intranet site. As per the Whistle Blower Policy, Directors and employees of the Bank, customers, stakeholders, non governmental organizations (NGO) and members of general public can lodge complaints/disclosures under the scheme. Vigi-lance Department of the Bank has the twin roles of investigation of frauds and prevention of frauds. Preventive measures for en-hancing awareness of fraud risk and for promoting a culture of compliance among the employees preventive vigilance audits, vigilance workshops, circulation of modus operandi of frauds

occurred in banking industry etc are done. Bank is also promoting customer awareness on frauds especially cyber frauds through dif-ferent communication channels, as an effective tool in prevention of frauds.

Website link to Banks Whistle Blower Policy/ Vigil Mechanism is http://www.federalbank.co.in/documents/10180//44686//Whistle+Blower+policy.pdf/67c5121d-ac8d-4861-b801-5a6ee8913b4e

Subsidiary and Audited financial statements of the Banks Subsidiaries

Fedbank Financial Services Limited is a fully-owned subsidiary of the Bank. The audited financial statements, the Auditors Report thereon and the Boards Report for the year ended March 31, 2015 of Fedbank Financial Services Limited, is available on the website of the Bank as required under the regulations.

Joint Venture in Life Insurance Business

The Banks joint venture Life Insurance Company, in associa-tion with IDBI Bank Limited and Fortis Insurance International N.V. (now Aegeas), namely IDBI Federal Life Insurance Company Limited, (erstwhile IDBI Fortis Life Insurance Company Limited)commenced operations in March 2008. Currently the Bank has a total stake of ` 208 Crore in the equity of the company holding 26% of the equity capital.

Corporate Governance

The Bank has adopted a Code of Corporate Governance which while taking care of and safe guarding the interest of sharehold-ers and all other stakeholders also provides good management, adoption of prudent risk management techniques. The Code of Corporate Governance and Code of Conduct for the Board of Di-rectors and Management was amended with effect from January 15, 2015 with the approval of the Board to keep pace with the changing governance structure and to comply with requirements of Companies Act, 2013, Lisitng Agreement and other regulations applicable to the Banking sector.

The Code also aims at identifying and recognizing the Board of Directors and the Management of the Bank as the principal in-struments through which good corporate governance principles are articulated and implemented, giving utmost importance to identify and recognize transparency, accountability and fair treat-ment amongst all the stakeholders, which is in tune with statutory and regulatory structures. A copy of the Code of Corporate Gov-ernance and Code of Conduct for the Board of Directors and Management is available on Banks website.

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Board of Directors

The composition of the Board of Directors is governed by the Banking Regulation Act, 1949, the Companies Act,2013, Listing Agreement, and the Code of Corporate Governance adopted by the Bank. The Board comprises of nine Directors as on the date of this report, with rich experience and specialized knowledge in various areas of relevance to the Bank, including banking, ac-countancy, MSME, finance, small scale industry, agriculture, and information technology.

Ms. Shubhalakshmi Panse was appointed as an Additional Inde-pendent Director on the Board of the Bank w.e.f. 29.04.2014 who was appointed as an Independent Director by the shareholders of the Bank at the Annual General Meeting of the Bank held on July 17, 2014.

Dr. M.Y Khan ceased to be a director of the Bank w.e.f. 24.06.2014, on completing seventy years of age as per Code of Corporate Gov-ernance. The Board places on record their appreciation for the commendable contribution made by Dr. M.Y Khan, as a Director, during his tenure in the Bank.

Mr. Abraham Chacko, Executive Director of the Bank retired as Director from the Board of the Bank w.e.f 30.04.2015 on comple-tion of his term of office.

Excluding the MD & CEO, all other members of the Board are Non-Executive and Independent Directors. Declaration has been obtained from the Independent Directors as required under the RBI Regulations, Listing Agreement and Companies Act. The re-muneration and other benefits paid to MD & CEO of the Bank and Executive Director during the year are disclosed in Annexure I to this Report and in Corporate Governance report. The non-executive Independent Directors apart from Prof. Abraham Koshy, are paid sitting fees for attending every meeting of the Board/Committees of the Board within the limits as prescribed under the Companies Act, 2013. Prof. Abraham Koshy+, Chairman of the Board is paid sitting fees for attending Board / Committee meetings in addition an amount of ` 1.25 lakhs per month as honorarium, as approved by the Board and RBI.

In compliance with the Companies Act,2013 all the existing Inde-pendent Directors of the Bank, were re-appointed as Independent Directors at the last Annual General Meeting of the Bank held on 17th July 2014 .

Mr. Shyam Srinivasan, Managing Director & Chief Executive Officer of the Bank is liable to retire at this AGM in compliance with Section 152 of Companies Act, 2013, regarding retirement of di-rectors by rotation. The detailed profile of Mr. Shyam Srinivasan, recommended for re-appointment in this AGM is mentioned in the Notice for the Annual General Meeting of the Bank.

Composition of Audit Committee

The Audit Committee consists of four Non-Executives, Independ-ent Directors, chaired by Nilesh S Vikamsey CA, a Non-Executive Independent Director. The Committee was re-constituted once in the financial year 2014-15.The members of the Committee are Nilesh S Vikamsey CA, Mr. Dilip G Sadarangani, Ms. Grace Koshie and Ms. Shubhalakshmi Panse who are Non-Executive In-dependent Directors. Dr. M Y Khan ceased to be a member of the Committee w.e.f. 24.06.2014. Ms. Shubhalakshmi Panse was nominated as a member w.e.f 26.06.2014.

The constitution of the Committee is in compliance with the regu-latory requirements.

The terms of reference of the Audit Committee and incorporated in the Banks Code of Corporate Governance, are in accordance with the listing agreements entered into by the Bank with Stock Exchanges where the Banks shares are listed, Companies Act, 2013 and RBI guidelines.

Independent Directors

In terms of the definition of Independence of Director as pre-scribed under Clause 49 of the Listing Agreement entered with Stock Exchanges and Section 149(6) of Companies Act, 2013 and based on the confirmation / disclosures received from the Direc-tors, the following Directors are Independent Directors of the Bank as on the date of this report:

1. Prof. Abraham Koshy+

2. CA. Nilesh S Vikamsey

3. Mr. Sudhir M Joshi

4. Mr. K M Chandrasekhar

5. Mr.Dilip G Sadarangani

6. Mr. Harish H Engineer

7. Ms. Grace Elizabeth Koshie

8. Ms. Shubhalakshmi Panse

Woman Director

In terms of the provisions of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a company shall have at least one Woman Director on the Board of the company. Your Bank has Ms. Grace Elizabeth Koshie and Ms. Shubhalakshmi Panse as Directors on the Board of the Bank.

Banks policy on directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of section 178;

+ Prof. Abraham Koshy retired as Director from the Board of the Bank w.e.f 18th May 2015

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A. Qualifications, Experience and knowledge

1. The Board should bring to their tasks a balanced mix of knowl-edge, skills, experience, and judgment relevant to the Banks policies, operations, and needs. More specifically, the Directors shall be persons having special knowledge, skills, or valuable experience in one or more fields, such as banking, finance, management, economics, law, accountancy, agriculture and rural economics, cooperative movement, trade, industry, infrastructure, engineering, and technology. At least two Di-rectors shall be persons having special knowledge or practical experience in agriculture and rural economy, cooperation, or small-scale industry.

2. The Directors should be able to devote sufficient time and at-tention to the discharge of their duties to the Bank.

3. The non-executive Directors shall preferably be in the range of 35-70 years.

B. Disqualification/Conflicts of interest

1. The Banks Directors shall be subject to the disqualifications/prohibitions contained in the Companies Act 2013 and the Banking Regulation Act, 1949 with respect to directorship of companies in general or banking companies in particular.

2. A Director shall not be a director of any other company, or partner or proprietor of a firm, where such directorship, part-nership, or proprietorship involves or is likely to involve actual or potential conflicts of interest as a Director of the Bank. A Director shall promptly inform the Board/Committee of any actual or potential conflicts of interest with respect to any matter that may come up for the consideration of the Board or of any committee of which he is a member, and shall refrain from participating in a discussion on the matter.

The terms and conditions of appointment of Independent Direc-tors is disclosed on the website of the Bank and a web link thereto is : http://www.federalbank.co.in/shareholder-information

C. Criteria for determining attributes of a director

(i) integrity in personal and professional dealings.

(ii) wisdom and ability to take appropriate decisions.

(iii) ability to read and understand financial statements

iv) ability to deal with others with a sense of responsibility, firmness, and cooperation.

v) refrain from any action that would lead to loss of his inde-pendence.

D. Criteria for determining Independence of a director

The Criteria of Independence of a director is determined based on the conditions specified in Section 149 (6) of the Companies Act, 2013.

The independent director shall at the first meeting of the Board in which he participates as a director and thereafter at the first meeting of the Board in every financial year or whenever there is any change in the circumstances which may affect his status as an independent director, give a declaration that he meets the criteria of independence.

Remuneration PolicyA. Policy on remuneration to Non-Executive Di-rectors/Independent Directors

The Policy of the Bank, based on the recommendation of the Nomination & Remuneration Committee for the payment of re-muneration to Non-Executive Directors/Independent Directors of the Bank is that the Non-Executive Directors will be paid only sitting fees for attending Board and Committees of the Board which is fixed within the limits of Companies Act, 2013 and as per the Listing Agreement.

B. Policy on remuneration to MD & CEO, Execu-tive Director, Key Managerial Personnel and other employees

The Compensation / Remuneration Policy of the Bank as approved by the Board contains the policy for payment of remuneration to Executive Directors including MD & CEO, Key Managerial Person-nel and for the employees of the Bank.

As per the guidelines given by RBI, Compensation/Remuneration Policy has been designed with the following Core Principles:

Core Principles1. Effective governance of compensation.2. Alignment of compensation with prudent risk taking.

3. Effective supervisory oversight and stakeholder engagement.

Change in the Policy

The following has been incorporated as an objective into the Policy for effective governance of compensation.

As per Section 178 of the Companies Act, 2013, the Nomina-tion and Remuneration committee shall formulate the criteria for determining qualifications, positive attributes and independence of a Director and recommend to the Board a Policy, relating to the remuneration for the Directors, Key Managerial Personnel and

23

other employees. The Nomination and Remuneration committee while formulating the policy shall ensure that:

a) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully

b) Relationship of remuneration to performance is clear and meets appropriate benchmarks; and

c) Remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and variable incentive pay reflecting short and long term perform-ance objectives appropriate to the working of the Company and its goals.

Monthly payment is being made to Whole Time Directors ie Managing Director & CEO and Executive Director as per terms and conditions approved by the Board and Reserve Bank of India. For Independent Directors only sitting fee is paid except to chairman of the Board to whom monthly payment is made additionally with the prior approval of Reserve Bank of India.

Compensation of Managing Director & CEO, Whole Time Directors and senior Executives(Non IBA)

The compensation paid out to the referred functionaries is divided into two components:

1. The fixed compensation is to be determined based on the industry standards, the exposure, skill sets, talent and qualifica-tion attained by the official over his/her career span. (Approval from RBI to be taken as per section 35B of the Banking Regula-tion Act while deciding the fixed and variable compensation part for Managing Director & CEO and Whole Time Directors)

2. The variable compensation for Managing Director & CEO and senior Executives (Non IBA package) to be fixed based on organizational performance and KPAs set for the official. The organizations performance is charted based on the revenue point index / performance scorecard which takes into account various financial indicators like revenue earned, cost deployed, profit earned, NPA position and other intangible factors like leadership and employee development. Variable pay is paid purely based on performance and is measured through Score cards for Managing Director & CEO /WTDs. The score card provides a mix of financial and non financial, quantitative and qualitative metrics. KPAs to contain targets on risk adjusted metrics such as RAROC, RARORAC, in addition to target on NPAs.

Compensation paid to Senior executives and other staff members on IBA package

The compensation paid to other officials that include Award Staff, Officers coming under Scale I to III and Senior executives coming under Scale IV to VII is fixed based on the periodic industry level settlements with Indian Bank Association. The variable compen-sation paid to functionaries is based on the Performance Linked Incentive Scheme, which has been formulated on the basis of performance parameters set in Performance Management System.

Policy on Board Diversity

Policy on Board Diversity of the bank mainly depends on the quali-fications for appointment of Directors of the Bank as contained in the Banking Regulation Act,1949 and satisfying the Fit and Proper Criteria for directors as per the regulatory requirement of RBI.

The Bank continuously seeks to enhance the effectiveness of its Board and to maintain the highest standards of corporate gov-ernance and recognizes and embraces the benefits of diversity in the boardroom. Diversity is ensured through consideration of a number of factors, including but not limited to skills, regional and industry experience, background and other qualities. In informing its perspective on diversity, the Bank also take into account factors based on its own business model and specific needs from time to time.

The Nomination Committee has responsibility for leading the process for Board appointments and for identifying and nominat-ing, for approval by the Board, candidates for appointment to the Board. The benefits of diversity continue to influence succession planning and continue to be the key criteria for the search and nomination of directors to the Board.

Board appointments are based on merit and candidates will be considered against objective criteria, having due regard for the benefits of diversity on the Board, including gender. While making Board appointments the requirement as per the Companies Act, 2013 for appointment of at least one woman director on the Board of the Bank is also considered.

Key managerial personnel who were appointed or have resigned during the year

In compliance with Section 203 of the Companies Act, 2013, Mr.Shyam Srinivasan, MD & CEO, Mr. Abraham Chacko$, Executive Director, Mr. Girish Kumar G, Company Secretary and Mr. Sampath D,CFO were designated as the Key Managerial Personnel of the Bank at the Board meeting held on July 16, 2014. Mr. Sampath. D, was appointed as officiating CFO of the Bank w.e.f. April 29, 2014.

$ - Mr. Abraham Chacko, Executive Director of the Bank retired as Director from the Board of the Bank w.e.f 01 May 2015

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FY14 FY15 Variation Variation in %

Market Capitalisation (` in Crores) 8189.61 11312.13 3122.52 38.13

PE Ratio 9.76 11.24 1.48 15.16

Closing Price of Federal Bank share was `132.05(Face Value `2 per share) on 31/03/2015.

Year Face Value Premium Rate(Face Value `10)

Bonus (2004)2:1

Rate(Face Value ` 2)

Increase in Amount

Increase in %

IPO 1994 10 80 90 30 6 126.05 2100.83%

Right Issue 2007 10 240 250 N.A. 50 82.05 164.10%

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors in-dividually as well as the evaluation of the working of its various Committees.

A structured questionnaire was prepared after taking into consid-eration inputs received from the Directors, covering various aspects of the Boards functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on specified parameters. The performance evalu-

ation of the Independent Directors was carried out by the entire Board other than the Independent Director Concerned. The per-formance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors. The Direc-tors expressed their overall satisfaction with the evaluation process but a few suggestions are being incorporated from the next year in relation to the current rating based system to a more qualitative approach.

Performance Evaluation of Non-Independent Directors (MD & CEO and Executive Director)

Criteria:

Attendance at the Board and Committee meetings; Presents fi-nancial reports to the board on a regular basis and submits an

Management Discussion and Analysis

The Management Discussion and Analysis Report for the year under review as stipulated under Clause 49 of the listing agree-ment with the Stock Exchanges in India is presented in a separate section forming part of this Annual Report.

Loans, Guarantees or Investments in Securities

Pursuant to Section 186(11) of the Companies Act, 2013 loans made, guarantees given or securities provided or acquisition of securities by a Banking company in the ordinary course of its business are exempted from disclosure in the Annual Report.

Internal Complaints Committees

Your Bank has upheld the letter and spirit contained in The Sexual Harassment of Women at Workplace (prevention, Prohibition and Redressal) Act, 2013 (the Act). Board of Directors had resolved to constitute Internal Complaints Committees to function as per the provisions laid down in the Act and also to support the women employees by way of counseling. Your Bank has constituted

ten Internal Complaints Committees (9 at Zones and 1 at Head Office) to prevent and redress the complaints relating to Sexual Harassment and to organize workshops/ awareness programs to empower women employees while handling cases relating to Sexual Harassment. Twenty employees were identified pan India and imparted a certification programme in employee counseling. These employees form part of the Internal Complaints Committee formed in various Zones of your Bank.

a. No. of complaints received in the year 2014 : 01b. No. of complaints disposed of during the year 2014 : 01

c.Nature of action taken by the employer/ District Officer: As per the recommendations of the committee punishment was imposed on the respondent/ erring employee.

Variations in the market capitalisation of the Bank

Variations in the market capitalisation of the Bank, Price Earnings Ratio as at the closing date of the current financial year and previous financial year is mentioned below.

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annual budget for board review; revision and approval; Appraises the Board regarding the organizations financial position and operational budget so as to enable the Board to make informed financial decisions; enhancement of internal control processes; monitoring, execution of policies and encouraging suggestions, achievements of performance against budgets , leadership in de-veloping strategy & directions for their execution, implementing Board decisions across IT, Operations, HR, Audit, Risk etc, media interactions & public relations, pursuing Organisation goals, ethics, motivating & guiding employees for better performance, relationship with Industry foras / Regulatory bodies, Compliance etc

Evaluation

The MD,s & EDs attendance at the Board and Committee meetings is very good; They present financial reports to the board on a regular basis and submits an annual budget for Board review; revision and approval; They regularly apprise the Board on the or-ganizations financial position and operational budgets that aids the Board to make informed financial decisions; The Executives constantly endeavor to enhance internal control processes,monitor execution of policies and are very receptive to suggestions. The MD has adequate qualities of Leadership in developing strategy & execution for achieving them, The MD & ED adequately endeavor to Implement Board decisions and are very strong in media inter-actions and have put in large efforts in building and reinforcing the Brand and image of the bank. The MD demonstrates his com-mitment to the Organisation goals, is ethical, motivates & guides employees for better performance. His personal rapport and good relationship with industry foras / regulatory bodies, etc are high-lights and testimony of the respect and prominence of Federal Bank in the Indian banking landscape.

Performance Evaluation of IndependentDirectors including Chairman

Criteria:

Attendance at meetings of Board and Committees, Knowledge & Ethics,; Understanding of the roles, responsibilities and duties as director / Chairman; Contributions at Board/Committee meetings including on strategy and risk management;

Evaluation:

The evaluation done brings out good attendance of Independ-ent Directors in the Board and committee meetings. They are knowledgeable , ethical and bring their respective expertise in the deliberations and make valuable contributions. They have adequate understanding of their role and responsibilities as Inde-pendent directors.

Performance Evaluation of Board and Committees

Criteria;

Size, composition , balance and diversity of background; Pro-portion of Independent to Non Independent Directors; Effective Participation ;candidness of communication, Ability to handle conflicts; Review of Performance / Financial Reporting / Compli-ance / other Agenda of / by Bank ; Information given to Board / Committees, Effectiveness as per Terms of Reference of Board and its committees ; Value addition ; Review of Related Party transac-tions, Potential conflicts of interests; Corporate Governance norms of conduct; flow of information to board

Evaluation

The structure and composition of the Board is appropriate with adequate number of Directors and a good balance of diverse pro-fessional backgrounds, business experience, industry knowledge, skills and expertise in areas vital to the Bank's success in its current and future position; The proportion of independent to non-in-dependent directors is good; The Board demonstrates integrity, credibility, trustworthiness, active and effective participation at Board & Committee meetings which are held at reasonable and regular intervals;

The Board and committee processes and procedures are good with different committees reviewing different functional areas of the Banks operations. The Board and its Committees also reviews Banks performance, risk management, financial reporting, com-pliances, technology, operations with adequate frequency of meetings etc..

The flow of information to the Board and its committees is gener-ally good.

Meetings

During the year nine Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and also the Listing Agreement.

Directors Responsibility Statement

The Directors have taken proper and sufficient care for the main-tenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Bank and for preventing and detecting fraud and other ir-regularities; and the Directors have prepared the annual accounts on a going concern basis.

26

To the best of the knowledge of the Directors and belief and ac-cording to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

a. that in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. that such accounting policies as mentioned in the Notes to the Financial Statements, have been selected and applied consist-ently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank as at March 31,2015 and of the profit of the Company for the year ended on that date;

c. that proper and sufficient care has been taken for the mainte-nance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;

d. that the annual financial statements have been prepared on a going concern basis;

e. that proper internal financial controls were in place and that the financial controls were adequate and were operating ef-fectively;

f. that systems to ensure compliance with the provisions of all ap-plicable laws were in place and were adequate and operating effectively;

Related Party Transactions

All related party transactions that were entered into during the financial year were on arms length basis and were in the ordinary course of business. There are no materially related party transactions made by the Bank with, Directors, Key Managerial Personnel who may have a potential conflict with the interest of the Company at large.

Wherever related party transactions took place they were placed before the Audit Committee and also to the Board for approval. Omnibus approval of the Audit Committee will be taken on a quarterly basis for the transactions which are foreseen and of re-petitive nature, which at this juncture is not there. The policy on Related Party Transactions after the approval by the Board has to be uploaded on the Banks website. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Bank.

Since all related party transactions entered into by the Bank were in the ordinary course of business and were on an arms length

basis, form AOC-2 is not applicable to the Bank.

Technology and Digital UpdatesThe Bank has the following modes of technology related banking:

Mobile Banking

Mobile based transactions and the adoption of mobile based ap-plications is set to increase with growth in usage of smart phones over the generic phones. As part of our Mobile banking strategy we have adopted migration of existing mobile banking applica-tion to a platform based solution in order to achieve the flexibility and agility required in the mobile application development and deployment in all kinds of mobile operating systems (OS).

Introduction of industry first game changing innovations like FedBook and Scan N Pay has taken Customer Delight to unprec-edented heights redefining the benchmark of service excellence.

FedBook is the Electronic version of a traditional bank pass book offered to Federal Bank customers free of cost. It helps customers to view all the transactions in their bank accounts.

Scan N Pay is an innovative Mobile Application for inter-bank fund transfer using the IMPS (24x7) facility. By using Scan N Pay, customers are freed from the hassles of keying in the details for fund transfer through IMPS. Transactions happening through Scan N Pay are executed in real time and confirmation messages are instantaneous which adds to the comfort level of Customers to use the application.

Mobile banking migration brings in the following benefits -

UI change- Improves customer experience

Availability of additional services to the customer

Development management Reduction in development time and cost due compatibility of platform across multiple mobile operating systems

Adoption of this platform has enabled easy maintenance of applications across mobile OS due to availability of advanced change management system.

Internet Banking

As part of our technology absorption strategy our Internet Banking solution has undergone an upgrade to an advanced product version. Migration of Internet Banking solution facilitates easier interfacing with other peripheral and external systems.

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AuditorsStatutory Audit

M/s. Deloitte Haskins & Sells, Chartered Accountants, Chennai, and M/s. M P Chitale & Co., Chartered Accountants, Mumbai, jointly carried out the statutory central audit of the Bank during the Financial Year 2014-15. Additionally 1220 number of branches were subjected to Branch Statutory Audit by 691 number of Branch Auditors. The statutory central/branch auditors audited all the branches and other offices of the Bank.

Secretarial Audit

The Board had in its meeting dated November 21, 2014, ap-pointed M/s. SVJS & Associates, Practicing Company Secretaries, to undertake the Secretarial Audit of the Bank during the Fi-nancial Year ended March 31, 2015, in compliance with the provisions of Section 204 of the Companies Act, 2013 and The Companies(Appointment and Remuneration of Managerial Per-sonnel) Rules, 2014. The Report of the Secretarial Audit Report is annexed herewith as Annexure VI.

Awards and Accolades

Excellence in administration, business and technological advance-ment have made your Bank the recipient of a host of recognitions during FY15.

The year witnessed the Bank being showered with a number of awards and accolades for its HR initiatives, which included the Fourth Annual Greentech HR Award for Innovation in Recruit-ment, Fifth Asias Best Employer Brand Award for Innovation in Retention Strategies, Asia Training & Development Award for Ex-cellence in Training, ICE Award for Best In-house Magazine and NIB Award for Best In-house Magazine. Besides, Asia Pacific HRM Congress Awards 2014 conferred the citation of The CEO with HR orientation to Mr. Shyam Srinivasan, MD & CEO; and the citation of 40 Most Talented HR Leaders and 100 Most Talented Global HR Leaders to the HR Head of the Bank, Mr. Thampy Kurian.

As a recognition for innovation in Technology, the Bank won the prestigious Banking Technology Excellence Awards 2014 from the Institute for Development and Research in Banking Technology (IDRBT) in 4 out of a total of 5 categories in the mid-sized Banks segment. The Bank was adjudged as: (a) Best Bank for Use of Tech-nology for Financial Inclusion, (b) Best Bank for Social Media and Mobile Banking, (c) Best Bank for Business Intelligence Initiatives and (d) Best Bank for Best IT Team.

Apart from the above, Federal Bank won the CNBC TV18 Financial Inclusion Award for the work done by the Bank towards the cause of Financial Inclusion and empowerment of those at the bottom

layer of the economy.

Your Bank was also chosen as the Best Bank among small banks in India in the Best Bank Survey, 2014 conducted by Business World-Price Waterhouse Coopers Combine; and as the Best Corporate Brand of the Year 2015 jointly by Ernakulam Press Club and Public Relations Council of India (PRCI) Kerala Chapter.

Consolidated Financial Statements

Pursuant to Section 129 of the Companies Act, 2013, the Bank has prepared a Consolidated Financial Statements of the Bank and also of its Subsidiary, Fedbank Financial Services Limited, in the same form and manner as that of the Bank which shall be laid before the ensuing 84th Annual General Meeting of the Bank along with the laying of the Banks Financial Statement under sub-section (2) of Section 129 i.e. Standalone Financial Statement of the Bank.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

Considering the nature of activities of the Bank, the provisions of Section 134 (3) (m) of the Companies Act, 2013 relating to con-servation of energy and technology absorption do not apply to the Bank. The Bank is, however, constantly pursuing its goal of tech-nological up gradation in a cost-effective manner for delivering quality customer service. Through its export-financing operations, the Bank supports and encourages the countrys export efforts.

Extract of Annual Return The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as Annexure III.

Particulars of Employees

As required by the provisions of Section 197 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of the employees who were in receipt of remuneration not less than sixty lakh rupees for FY 2014-15 are set out in the Annexure to the Directors Report. (Annexure I).

The ratio of the remuneration of each director to the median em-ployees remuneration and other details in terms of sub-section 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Mana-gerial Personnel ) Rules, 2014, are forming part of this report as Annexure VI.

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Annexures

Annexure I

Name, Qualification and Age ( in years) Designation

Remuneration (in `) Experience(in years)

Date ofcommencement of employment

Last employment

Gross @ Net#

Mr. Shyam Srinivasan, B.E.,P.G.D.M (IIM, Kolkata), 53 years

Managing Director &CEO

7799556 5483757 29 years 23rd September 2010

Head(Consumer Banking-India), Standard Chartered Bank

Mr. Abraham Chacko$, Post Graduate Diploma in Business Manage-ment (XLRI, Jamshedpur), Bachelor in Commerce (Honors) 62 years

Executive Director

7507377 5294943 36 years 21st May 2011 Regional Head of Business Sales/Trade-Asia/Middle East/Central Asia/Africa/ABN Amro bank/RBS

Mr. Ashutosh Khajuria, B.Sc(Physics),LL.B,M.A.(Economics),CAIIB,DTIRM,55 years

President(Treasury)

7190630 5100630 31 years 16th June 2011 CGM & Head of Treasury, IDBI Bank Limited

# Net of Taxes paid@ In addition to the above 6,41,375 stock options were granted to Mr. Shyam Srinivasan, MD & CEO @ market rates relevant on the date of grant. Though the Board had offered 25,65,500 shares of ` 2/- each as ESOS to Shri. Shyam Srinivasan has accepted one fourth of the shares offered and balance has been distributed to the employees for the grant 2014. Mr. Ashutosh Khajuria holds 1000 shares of the Bank as on March 31, 2015.

Stock Exchange Information

The Banks Equity Shares are listed on:

1. BSE Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001 and

2. National Stock Exchange Ltd. Exchange Plaza, Bandra - Kurla Complex Bandra East, Mumbai - 400 051.

The GDRs issued by the Bank are listed on the London Stock Exchange.

The annual listing fees have been paid to all the Stock Exchanges mentioned above.

Acknowledgement

The Board of Directors places on record its sincere thanks to the Government of India, Reserve Bank of India, various State Govern-ments and regulatory authorities in India and overseas for their valuable guidance, support and cooperation. The Directors wish to express their gratitude to Investment Banks, rating agencies and Stock Exchanges for their wholehearted support.

The Directors record their sincere gratitude to the Banks share-holders, esteemed customers and all other well-wishers for their continued patronage. The Directors express their appreciation for the contribution made by every employee of the Bank.

For and on behalf of the Board of Directors

Abraham Koshy Chairman of the BoardAluvaDate: 16 May 2015

$ - Mr. Abraham Chacko, Executive Director of the Bank retired as Director from the Board of the Bank w.e.f 01 May 2015

29

Esos Details

Annexure II

Sl. no. Particulars

ESOP 2010 Granted On

April 09,2011

ESOP 2010 Granted On June 02,2011

ESOP 2010

Granted On June 16,2011

ESOP 2010 Granted On Nov 05,2012

ESOP 2010 Granted On

Sept 12,2013

ESOP 2010 Granted On Sept 12,2014

1 No. of options Granted 1,65,60,100 5,00,000 3,00,000 1,22,42,375 1,30,47,125 55,78,225

2 No. of options issued Nil Nil Nil Nil Nil Nil

3 Pricing Formula The exercise price considered is the closing market price as on the day preceding the date of the grant, at the stock exchange which has had the maximum trading volume of the Banks share.

4 No. of options vested & Exercis-able

1,19,90,932 5,00,000 2,50,000 51,12,746 26,33,355 0

5 No. of Options exercised 10,21,158 0 0 1,95,674 1,97,860 0

6 No. of shares arising as a result of exercise of Options

10,21,158 0 0 1,95,674 1,97,860 Nil

7 Options lapsed 23,63,510 0 0 16,17,535 18,24,595 4,45,400

8 Variation in terms of Options Nil Nil Nil Nil Nil Nil

9 Money realized by exercise of options

8,59,10,023 Nil Nil 1,85,49,895 1,13,27,485 Nil

10 Total Number of Options in force 1,31,75,432 5,00,000 3,00,000 1,04,29,166 1,10,24,670 51,32,825

11 Employee wise details of Options granted to

a) Senior Managerial Personnel i.e MD & CEO*

25,65,500 - - 6,41,375 6,41,375 6,41,375

ED I 50,625 - - 75,000 - -

ED II - 5,00,000 - 325,000 325,000 -

b) Any other employee who receives a grant in any one year of Options amounting to 5% or more of the options granted dur-ing the year

Nil Nil Nil Nil Nil Nil

c) Identified employees who were granted options, during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conver-sions) of the company at the time of grant.

Nil Nil Nil Nil Nil Nil

* As explained earlier in Page 28.

30

12 Diluted Earnings Per Share (EPS) of the Bank after considering the ef-fect of potential equity shares on account of exercise of Options

` 11.75 per share

13

Impact of the difference between the Intrinsic Value of the Options and the Fair Value of the Options on Profits and on EPS

Had the Bank adopted the fair value method (based on Black-Scholes pricing method) for pric-ing and accounting options, Net profit after tax would have been lower by ` 2542.26 lacs for FY 2014-15

Basic EPS ` 11.45 per share

Diluted EPS ` 11.33 per share

14 Weighted average exercise prices of options

i. whose exercise price equal to market price

` 84.83

ii. Exercise price is greater than Market price

Nil

iii. Exercise price is greater than Market price

Nil

Weighted average fair value of options

i. whose exercise price equal to market price

` 25.76

ii. Exercise price is greater than Market price

Nil

iii. Exercise price is greater than Market price

Nil

15 The Securities and Exchange Board of India (SEBI) has prescribed two methods to account for stock grants; (i) the intrinsic value method; (ii) the fair value method. The Bank adopts the intrinsic value method to account for the stock options it grants to the em-ployees. The Bank also calculates the fair value of options at the time of grant, using Black-Scholes pricing model with the following assumptions:

i. Risk Free interest rate 7.50% 8.25% 8.25% 8.00% 8.50% 8.50%

ii. Expected life 3 years to 4.5 years

3 years to 4 years

3 years to 4.5 years

3 years to4.5 years

3 years to 4.5 years

3 years to 4.5 years

iii. Expected volatility 20% 20% 20% 20% 50% 50%

iv. Expected Dividends 1.50% 1.50% 1.50% 1.50% 2.00% 2.00%

v. The price of the underlying share in market at the time of grant of option (in `)

84.69 89.94 90.93 94.80 57.25 124

Sl. no.

Particulars ESOP 2010 Granted On April 09,2011

ESOP 2010 Granted On June 02,2011

ESOP 2010 Granted On June 16,2011

ESOP 2010 Granted On Nov 05,2012

ESOP 2010 Granted On Sept 12,2013

ESOP 2010 Granted On Sept 12,2014

# All the option numbers mentioned in the Annexure are of face value of ` 2/- each.

31

Annexure III

Extract of Annual Returnas on the financial year ended 31.03.2015

Pursuant to Section 92(3) of the Companies Act, 2013, and Rule 12(1) of the Companies (Management and Administration) Rules, 2014]

FORM NO. MGT - 9

I. Registration and Other Details

CIN L65191KL1931PLC000368

Registration Date 23 April 1931

Name of the Company THE FEDERAL BANK LIMITED

Category/Sub-category of the Company

Company having Share Capital

Address of the Registered Office and contact details

Federal Towers, P B NO 103, Aluva, Ernakulam- 683 101,Tel-0484 2630996

Whether Listed company Yes

Name address and contact details of Registrar and Transfer Agent

M/s. Integrated Enterprises (India) Ltd, 2nd Floor, Kences Towers,No.1,Ramakrishna Street, Off : North Usman Road, T. Nagar, Chennai-600017Phone No: 044-28140801-03Email: csdstd@integratedindia.in

II. Principal Business Activities of the Company

All the business activities contributing 10% or more of the total turnover of the company shall be stated:-

Sl. No

Name and De-scription of main products / services

NIC Code of the Product/ Service

% to total turnover of the company

1 Banking services 64191 99.68%

III. Particulars of Subsidiary and AssociateCompanies

Sl. No

NAME AND ADDRESS OF THE COMPANY

CIN/GLN HOLDING /SUBSIDI-ARY/AS-SOCIATE

% of Shares

held

Ap-pli-

cable Sec-tion

1. Fedbank Financial Services Limited

U65910KL-1995PLC008910

Subsidiary 100% 2(87)

2. IDBI Federal Life Insurance Company Limited

U66010MH-2007PLC167164

Associate 26% 2(6)

32

IV. Shareholding Pattern (Equity Share Capital Break up as percentage of Total Equity)

(i) Category-wise Shareholding

Category of Share-holder No. of shares held at the beginning of the year No. of shares held at the end of the year

% Changeduring the

year

Demat Physical Total % of Total

Shares Demat Physical Total

% of Total

Shares

A PROMOTERS

(1) Indian

a Individual/HUF

b Central Government

C State Governments

d Bodies Corporate

e Banks / FIs

f Any other (Specify)

Sub Total A(1)

(2) Foreign

a NRI - Individuals

b Other - Individuals

c Bodies Corporate

e Banks / Fis

e Any other (Specify)

Sub Total A(2)

Total shareholding of Promoter (A)= (A)(1) +(A)(2)

B PublicShareholding

(1) Institutions

a Mutual Funds (in-cludes UTI)

153,016,911 47,890 153,064,801 17.90 213,065,970 47,890 213,113,860 24.88 7.01

b Financial Institutions / Banks

44,828,605 64,750 44,893,355 5.25 68,661,514 64,750 68,726,264 8.02 2.78

c Central Government 5 0 5

d State Governments - -

e Venture capital Funds

f Insurance Companies

g FIIs 349,898,829 165,125 350,063,954 40.93 302,961,967 165,125 303,127,092 35.38 -5.48

h Foreign Venture Capital Investors

i Any other (Specify) - Foreign Banks

720,475 0 720,475 0.08 1,908,053 0 1,908,053 0.22 0.14

Sub Total B(1) 548,464,820 277,765 548,742,585 64.16 586,597,509 277,765 586,875,274 68.51 4.45

(2) Non-Institutions

a Bodies Corporate 76,852,964 376,355 77,229,319 9.03 55,016,244 375,885 55,392,129 6.47 -2.55

b Individuals (Resident/NRI/Foreign National)

0 0 0

33

( i ) Individual Sharehold-ers holding Nominal Share Capital upto `1 Lakh

76,786,448 20,910,580 97,697,028 11.42 78,974,075 19,304,925 98,279,000 11.47 0.07

(ii) Individual Sharehold-ers holding Nominal Share Capital in excess of `1 Lakh 61,727,513 643,020 62,370,533 7.29 70,501,701 643,020 71,144,721 8.30 1.02

c Any other -Clearing Members 6,012,215 0 6,012,215 0.70 1,057,686 0 1,057,686 0.12 -0.58

-Trusts 921,920 64,650 986,570 0.12 3,795,317 33,900 3,829,217 0.45 0.33

-Corporate Body - Foreign Bodies 41,121,195 0 41,121,195 4.81 22,703,920 0 22,703,920 2.65 -2.15

Limited Liability partnership 123,750 0 123,750 0.01 703,662 0 703,662 0.08 0.07

OverseasCorporate Bodies 0 3000 3000 0.00 0 3000 3000 0.00 -

Sub Total B(2) 263,546,005 21,997,605 285,543,610 33.38 232,752,605 20,360,730 253,113,335 29.55 -3.79

Total Public Share-holding (B)= (B)(1)+(B)(2)

812,010,825

22,275,370 834,286,195 97.54

819,350,114

20,638,495 839,988,609 98.05 0.67

C Shares held by Cus-todians for GDRs and ADRs 21,025,590 0 21,025,590 2.46 16,666,588 0 16,666,588 1.95 -0.51

Grand Total (A) + (B) + ( C)

833,036,415

22,275,370 855,311,785 100.00

836,016,702

20,638,495 856,655,197 100.00 0.16

(ii) Shareholding of Promoters

Sl No.

Sharehold-ers Name

Shareholding at the beginning of the year

Shareholding at the END of the year % change in share-holding during the

year

No. of shares % of total shares of the company

No. of shares % of total shares of the company

NIL

(iii) Change in Promoters Shareholding

Sl No.

Shareholding at thebeginning of the year

Cumulative Shareholding during the year

No. of shares % of total shares of the company

No. of shares % of total shares of the company

At the beginning of the year

Date wise Increase/ Decrease in Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment /transfer/ bonus/ sweat equity etc):

NIL

At the End of the year

Category ofShareholder No. of shares held at the beginning of the year No. of shares held at the end of the year

% Changeduring the

year

34

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs)

Sl No. Shareholding at the beginning of the year

Cumulative Shareholdingduring the year

For Each of the Top 10 Shareholders No. of shares % of total shares of the company

No. of shares % of total shares of the company

1. WARHOL LIMITED 42,361,519 4.95 42,361,519 4.94

2. INTERNATIONAL FINANCE CORPORATION 41,121,195 4.81 22,703,920 2.65

3. FRANKLIN TEMPLETON INVESTMENT FUNDS 34,660,192 4.05 31,374,443 3.66

4 YUSUFFALI MUSALIAM VEETTIL ABDUL KADER 31,576,820 3.69 31,576,820 3.69

5 LIFE INSURANCE CORPORATION OF INDIA 24,592,715 2.88 18,967,380 2.21

6 MORGAN STANLEY MAURITIUS COMPANY LIMITED

24,439,833 2.86 0.00

7 AMANSA CAPITAL PTE LIMITED A/C AMANSA HOLDINGS PRIVATE LIMITED

21,902,847 2.56 0.00

8 M/S NAPEAN TRADING AND INVESTMENT CO PVT LTD

21,804,574 2.55 3,615,717 0.42

9 GENERAL INSURANCE CORPORATION OF INDIA

18,005,000 2.11 15,300,000 1.79

10 PRUDENTIAL ASSET MANAGEMENT (SINGA-PORE)

17,436,777 2.04 0.00

11 BANK MUSCAT S A O G A/C BANKMUSCAT INDIA FUND

16,677,605 1.95 16,719,605 1.95

12 DEUTSCHE BANK TRUST COMPANY AMERI-CAS

14,859,545 1.74 14,604,765 1.70

13 MFS INTERNATIONAL NEW DISCOVERY FUND 14,223,575 1.66 14,223,575 1.66

14 AMANSA HOLDINGS PRIVATE LIMITED 25,056,956 2.92

Total 855,311,785 856,655,197

(V) Shareholding of Directors and Key Managerial Personnel

Sl No. Shareholding at the beginning of the year

Cumulative Shareholdingduring the year

For Each of the Directors and KMP No. of shares % of total shares of the company

No. of shares

% of total shares of the

company

1. Prof. Abraham Koshy+ 5000 0.000584 5000 0.000584

Date wise Increase/ Decrease in Sharehold-ing during the year specifying the reasons for increase / decrease (e.g. allotment /transfer/ bonus/ sweat equity etc):

NIL

At the End of the year 5000 0.000584 5000 0.000584

2. Mr. Abraham Chacko$ 5000 0.000584 5000 0.000584

Date wise Increase/ Decrease in Sharehold-ing during the year specifying the reasons for increase / decrease (e.g. allotment /transfer/ bonus/ sweat equity etc):

NIL

At the End of the year 5000 0.000584 5000 0.000584

+ Prof. Abraham Koshy retired as Director from the Board of the Bank w.e.f 18th May 2015$ - Mr. Abraham Chacko, Executive Director of the Bank retired as Director from the Board of the Bank w.e.f 01 May 2015

35

V. IndebtednessIndebtedness of the Company including interest outstanding / accrued but not due for payment

Secured Loansexcluding deposits Unsecured Loans Total Indebtedness

Indebtedness at the beginning of the financial year

i) Principal Amount 1,536.48 4,151.48 5,687.96

ii) Interest due but not paid

iii) Interest accrued but not due 1.34 46.87 48.21

Total (i+ ii+ iii) 1537.82 4,198.35 5,736.17

Change in Indebtedness during the financial year

Addition 205,151.53 50,801.41 255,952.94

Reduction 206,371.17 52,962.77 259,333.94

Net Change -1219.64 -2,161.36 -3,381

Indebtedness at the end of the financial year

i) Principal Amount 318.12 1,990.12 2,308.24

ii) Interest due but not paid

iii) Interest accrued but not due 0.06 28.66 28.72

Total (i+ii+iii) 318.18 2,018.78 2,336.96

(` in Crores)

VI. Remuneration of Directors and Key Managerial Personnel A. Remuneration to Managing Director, Whole -time Directors and / or Manager:

Sl. No Particulars of Remuneration Name of MD/WTD/ Manager Total Amount

Mr. Shyam Srinivasan (MD &CEO)

Mr. Abraham Chacko (ED)

1. Gross salary +

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 6,999,960 6,499,980 13,499,940

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 799,596 1,007,397 1,806,993

(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961

2. Stock Option (granted during the year) 641375 options* - 641375 options

3. Sweat Equity NIL NIL NIL

4. Commission-As % of profit-Others, specify NIL NIL

5. Others, please specify

Total (A) 7,799,556 7,507,377 15,306,933

Ceiling as per the Act# NA NA

+ Prof. Abraham Koshy retired as Director from the Board of the Bank w.e.f 18th May 2015

* As explained earlier in Page 28.+ Considering the performance of the Bank in FY 14 PLI was foregone by MD and ED.# Remuneration to MD & CEO and ED as per RBI approval as per Section 35B of Banking Regulation Act, 1949.

$ - Mr. Abraham Chacko, Executive Direc